The Brazilian branch of Telecom Italia, TIM Brasil, is seeking to overturn a regulatory decision that prevents it from offering new mobile contracts. The Brazilian regulator Anatel imposed the measure to punish the operator as its network has been underperforming.

The punishment bans TIM Brasil from offering any further mobile phone plans in 19 Brazilian states – there are 27 in total. The operator has initiated a legal challenge in the country’s courts, claiming that the measure was "excessive and creates an imbalance in competitiveness of the market."

Anatel has claimed that as similar penalties have been imposed on other major operators, the firms will have a strong impetus to improve their networks. However, the sales bans are less draconian for America Movil’s Claro – which can no longer sell in just 3 states – and Oi, which is banned from offering new contract in 5 states. The operators will be fined BRL200,000 (US$99,000) daily and per state if they go against the ban.

The operators have been ordered to submit their immediate plans for improving their networks within one month; Anatel will then use these as the basis for its decision on whether to repeal each operator’s sales ban. It will reach a decision within 2 weeks. While three other operators were spared the penalty, they must also provide their network improvement plan in the same timeframe.

Anatel was forced to take action against the operators in the face of rising complaints about the quality of services. This is a particular problem with regard to the upcoming football World Cup in 2014, as well as the 2016 Olympics, and the regulator is aiming to make sure that the networks are up to standard by this time.